Monthly Notes | Hoodies & the Charlottesville Market

I’m going to be posting my previously-written monthly notes. Since starting these in early 2013, the only thing that I’ve lamented about the notes is the lack of search- and link-ability. I’ve written before that the blog is my pensieve, and, simply, I want to be able to link to these stories for my clients (and for me).

So, apologies for the cluttering of your feeds for the next few days (fixing formatting from the notes to the blog is time-consuming). This one is from June 2013.

Thank you as always for choosing to spend a few minutes reading my notes every month. I truly value your time and appreciate your feedback and replies. I’ve been talking about this note for a few months, and I appreciate your patience. This month: (I was aiming for under 1k words, now I’m shooting for under 1500) I’m talking about the ethical dilemma I’ve been teasing for a couple months, a quick market update and a couple other things.

In what I’ve taken to calling “The Hoodie” email –

Super-fast back-story: Sometime in the past I represented a buyer. As part of the home inspection process, we sought out an expert to further educate and guide us. He was highly recommended and clearly knew what he was talking about. So that all parties – agents and clients – could be on the same page, I recorded his inspection, his explanation, – everything – and sent our request along with the video to the sellers’ agent. Now, I know this agent, but not well enough for her to wrongly assume I share her prejudices.

The response –

“I watched the video this am and got a good laugh:)) I don’t know that the man with the strong accent in a hoodie inspired me to consider him an expert! I’ll await the written report with his credentials.”

I’ve asked a couple real estate experts and the responses have ranged from “that’s awful, unprofessional, typical for southerners (it’s not)/should be an ethical violation/ I wish it were a fair housing violation …”

To me, it’s wrong – on moral and ethical fronts as well as those of common decency to your fellow man. I didn’t respond to her; focus was on my clients’ best interests and deviating from the negotiations to address prejudice and ignorance would not have served them well. I’m inclined to let this go – primarily so that my clients won’t have to rehash this; I’d much prefer they simply enjoy their home as they and the sellers seemed to be great people.

What do you think? Let it go? Chalk it up as something that’s a reality in this world? Something else? For now, I see it as a lesson that prejudice still exists in the most unlikely places.

“We’re only as good as the agent on the other side of the transaction, and that scares the sht out of me”

As said to me last month by a fellow agent. To which I say “amen”. The best, most competent agent in the world can be nearly defeated by an agent on the other side who either isn’t competent or doesn’t care, and that’s a terrifying thing. A simple example: if one agent lives by the contract, the deadlines, etc, and the other doesn’t … all parties suffer (and the client with the unresponsive agent probably doesn’t know). There’s no good way for the public (or agents) to ascertain who’s good and who’s not so good until you’ve experienced the difference. Consumers tend to use a Realtor only once every 5-7 years, so it’s hard to know the difference until after the fact. The best way? Ask a good Realtor. (I know … it’s a Catch-22)

The Market

Buyer activity seems to be slowing. Interest rates are rising. Quality inventory is still lacking. If you want to sell, I’d be inclined to advise you to put your house on the market now-ish. If you’re looking to buy, keep looking, but be prepared to be frustrated. Some sellers are deluding themselves that the house prices increase nationwide 12%! headlines are telling them to ask for insane prices. Do your math. Be unemotional. Hire great representation.

April of last year – for the Charlottesville MSA – 207 single family homes went under contract. This year – 293 single family homes went under contract.

For Charlottesville and Albemarle – 134 single family homes went under contract in April of 2012; 187 went under in in April 2013. 144 single family homes went under contract in May 2012; 147 homes went under in May of 2013.

Year over year, April 2013 was *much better April last year. But May … there’s a question. Is this recovery sustainable?

Appraisals

We’re seeing appraisals coming back (for the most part) at or above purchase price … but … just because most things are going ok doesn’t mean that everything is. Read the following note I received from a good Charlottesville lender.

The market is heating up and buyers are feeling more confident about home ownership. That coupled with the fact that inventory is down we are seeing multiple offers being put on well-priced properties. Listing agents are doing a good job of establishing the true market value of the property. When multiple offers come in the top offer is sometimes over the list price of the house. Of course the Sellers want to take the highest offer to make the most money. The issue that can arise from this scenario is with the appraisal.
As lenders we can only lend on the lesser of the sales price or the appraised value. When the appraisal comes in lower than the sales price which might be right around the original listing price you have unhappy clients. Is it possible for you to prep the Sellers enough for a scenario like this? … We’re right in that period where the market is hearing up but there isn’t enough history of sales for appraisers to draw on and substantiate the sales price.

We are in an odd point in the Charlottesville market – some segments are stabilized and increasing in value, but the comps may not be there yet … what a ready, willing and able buyer is willing to spend is a determinant of market value. The appraisal is another, and the above example is another reason I try to meet all of the appraisers onsite.

Geographic Information Systems (GIS)

There’s a lot of information out there – on Google, Zillow, County and City GIS sites … but … here’s what I want: click on a property parcel on a map (or better yet, use your mobile) and be able to search for criteria that is useful – (natural language search would be a bonus) stuff like “what’s going to happen to the immediate parcels” or “are there any building permits issued that will affect this property?” or “what’s going to happen in this geographical area (radius/school district/neighborhood) in the next 18 months?

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About Jim Duncan

I am a Realtor/Broker/Partner with Nest Realty in Charlottesville, Virginia. The goal of this site/blog remains unchanged in the nearly 10 years since its founding – to provide clear, coherent and unbiased analysis of the Charlottesville area real estate market.